Employee Benefits and Share-Based Compensation

Stock based plans

For a detailed explanation of the Company's stock plans and subsequent changes, please refer to Note 11, Employee Benefits and Stock-Based Compensation, of its Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 26, 2016.

Share-based compensation expense

The following table sets forth the total share-based compensation expense recognized in the Company's Condensed Consolidated Statements of Operations:



	Three months ended				Six Months Ended
	June 30, 2016		June 30, 2015		June 30, 2016		June 30, 2015
	(In thousands)
Cost of product and service revenues	$	644	$	532	$	1,193	$	1,049
Research and development	801		451		1,442		885
Selling, general and administrative	4,050		2,653		6,751		5,367
Total share-based compensation expense	$	5,495	$	3,636	$	9,386	$	7,301

The following weighted average assumptions are used to value stock options and Employee Stock Purchase Plan ("ESPP") shares issued pursuant to the Company's equity incentive plans for the three and six months ended June 30, 2016 and June 30, 2015:



	Three months ended				Six months ended
	June 30, 2016		June 30, 2015		June 30, 2016		June 30, 2015
	(In thousands, except percentages)
Stock Option Plans
Expected life, years	4.92		5.04		4.92		5.04
Expected volatility, %	31.5	%	29.3	%	32.0	%	32.2	%
Risk free interest rate, %	1.41	%	1.51	%	1.40	%	1.58	%
Estimated forfeiture rate %	8.6	%	2.5	%	8.6	%	2.5	%
Dividend yield, %	—	%	—	%	—	%	—	%



	Three months ended				Six Months Ended
	June 30, 2016		June 30, 2015		June 30, 2016		June 30, 2015
	(In thousands, except percentages)
Employee Stock Purchase Plan
Expected life, years	0.5-2.0		0.5-2.0		0.5-2.0		0.5-2.0
Expected volatility, %	25.79-34.79%		28.52-37.53%		25.79-34.79%		23.75-35.67%
Risk free interest rate, %	0.26-0.79%		0.03-0.72%		0.26-0.79%		0.03-0.72%
Dividend yield, %	—	%	—	%	—	%	—	%

Stock options activity

The following table summarizes the share option activity under the Company’s equity incentive plans during the six months ended June 30, 2016:



	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Years	Aggregate Intrinsic Value⁽¹⁾
	(In thousands, except per share data)
Stock Options
Outstanding at December 31, 2015	2,688		$	22.89	6.9
Granted	443		28.14
Exercised	(228	)	18.22
Expired	(4	)	27.58
Forfeited	(73	)	28.68
Outstanding at June 30, 2016	2,826		$	23.94	7.04	$	29,422
Exercisable at June 30, 2016	1,391		$	18.85	5.11	$	21,400
Vested and expected to vest at June 30, 2016 and thereafter	2,660		$	23.61	6.91	$	28,558

_________________________________________________

The weighted-average fair value per share of options granted during the three and six months ended June 30, 2016, was $9.03 and $8.59, respectively, and the weighted-average fair value per share of options granted during the three and six months ended June 30, 2015 was $10.09 and $10.61, respectively. The intrinsic value of options exercised during the three and six months ended June 30, 2016 was $2.2 million and $2.9 million, respectively. The intrinsic value of options exercised during the three and six months ended June 30, 2015 was $4.3 million and $6.7 million, respectively.

As of June 30, 2016, total unrecognized compensation cost related to unvested stock options was $10.7 million, which is expected to be recognized over a weighted-average vesting period of 2.95 years.

Restricted stock activity

The following table summarizes the restricted stock activity under the Company’s equity incentive plans during the six months ended June 30, 2016:



	Number of Shares		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Years	Aggregate Intrinsic Value
	(In thousands, except per share data)
Restricted Stock Units ("RSUs")
Outstanding at December 31, 2015	417		$	28.49	1.6
Granted	104		28.09
Vested	(78	)	25.57
Forfeited	(17	)	27.54
Outstanding and unvested at June 30, 2016	426		$	28.97	1.43	$	14,567

The weighted-average grant date fair value per share of RSU granted during the six months ended June 30, 2016 and June 30, 2015 was $28.09 and $34.19, respectively.

As of June 30, 2016, total unrecognized compensation expense related to RSUs was $9.9 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.7 years.



	Number of Shares		Weighted-Average Grant Date Fair Value
	(In thousands, except per share data)
Restricted Stock Awards ("RSAs")
Outstanding at December 31, 2015	31		$	35.97
Granted	35		31.59
Vested	(31	)	36.03
Forfeited	—		—
Outstanding and unvested at June 30, 2016	35		$	31.56

As of June 30, 2016, total unrecognized compensation cost related to RSAs was $0.9 million, which is expected to be recognized over the remaining weighted-average vesting period of 0.91 years.

Performance-based restricted stock unit activity

The following table summarizes the performance-based restricted stock activity under the Company’s equity incentive plans during the six months ended June 30, 2016:



	Number of Shares		Weighted-Average Grant Date Fair Value Per Unit
	(In thousands, except per share data)
Performance-based Restricted Stock Units ("PSUs")
Outstanding at December 31, 2015	151		$	23.33
Granted	122		24.66
Vested	(52	)	23.04
Forfeited	—		—
Outstanding and unvested at June 30, 2016	221		$	24.13

The weighted-average grant date fair value per share of PSUs granted during the six months ended June 30, 2016 and June 30, 2015 was $24.66 and $29.56, respectively. As of June 30, 2016, total unrecognized compensation cost related to PSUs was $2.6 million, which is expected to be recognized over the remaining weighted-average period of 1.5 year

Employee Stock Purchase Plan activity

As of June 30, 2016, the unrecognized compensation cost related to the shares to be purchased under the ESPP was approximately $4.9 million and is expected to be recognized over a weighted-average period of two years.

Summary of shares reserved for future issuance under equity incentive plans

The Company had the following ordinary shares reserved for future issuance under its equity incentive plans as of June 30, 2016:



	Number of Shares
	(In thousands)
Share options outstanding	2,826
Non-vested restricted share awards	682
Shares authorized for future issuance	2,904
ESPP shares available for future issuance	3,053
Total shares reserved for future issuance	9,465

During the three and six months period ended June 30, 2016, the Company did not repurchase any of its outstanding common stock. The Company repurchased approximately 680,000 shares under its stock repurchase programs for $25.02 million during six months ended June 30, 2015.